Plaintiff Carey International and defendant International Chauffeured Services are competitors in the limousine industry. Carey sued International back in 2005 for trademark infringement, and the parties settled the case. They entered into a consent judgment, which is, essentially, like a contract between the parties that was made an order of the court. The consent judgment prohibited, among other things, the defendant from owning any domain name containing the word “Carey.”

In February 2007, the plaintiff noticed that the defendant owned a domain name careylimousine.net. The plaintiff eventually went back into court, asking that the defendant be held in contempt for violating the consent judgment and, pursuant to the terms of the consent judgment, be awarded attorneys fees and “liquidated damages,” for breaching the agreement.

The court found that ownership of the domain name by the defendant warranted a contempt citation. It also found that that ownership was a breach that made an award of attorney’s fees proper. But the court declined to award liquidated damages.

The consent judgment provided that liquidated damages be awarded for any “infringement” of the plaintiff’s mark. But in this case, there was no infringement. The court found that merely owning the domain name, without having an active site there, was not a “use” in commerce as required by the Lanham Act. Without the requisite element of use, there could be no infringement.

Evan Brown is an attorney in Chicago helping businesses and individuals identify and manage issues dealing with technology development, copyright, trademarks, domain names, software licensing, service agreements and other matters involving the internet and new media.

Evan is a partner in the law firm of Much Shelist, P.C. He is an adjunct professor of law at Chicago-Kent College of Law, and is a Domain Name Panelist with the World Intellectual Property Organization (WIPO).